Mediaboss Marketing

GOP presidential candidate Rand Paul proposes to replace the current tax code with a 14.5 percent flat tax. | Chip Somodevilla via Getty Images

WASHINGTON -- Sen. Rand Paul (R-Ky.) wants to "blow up the tax code," and he's proposing a new, far-reaching flat tax to do it. The only problem is that his plan could blow up the size of the deficit, too.

The libertarian-leaning senator from Kentucky argued in a Wall Street Journal op-ed on Thursday that legislators should scrap the current tax code, which he described as overly complicated with far too many handouts for corporate interests, in favor of a "fair and flat" system that would tax all income levels at 14.5 percent.

It's an idea that former White House wannabe Steve Forbes tried to popularize in the 1990s, although the Forbes Media chief called for a slightly higher tax rate of 17 percent. Current GOP presidential candidates like Texas Sen. Ted Cruz and former Arkansas Gov. Mike Huckabee have endorsed similar proposals, but Paul is the first in the 2016 race to offer specifics.

Paul's plan would reduce corporate and individual tax rates while eliminating gift and estate taxes, telephone taxes, duties and tariffs, and, perhaps most significantly, payroll taxes. He would eliminate most personal deductions, sparing only those for home mortgages and charitable giving, which are supported by both liberals and conservatives.

For a family of four, the first $50,000 of income would be tax-free. The plan would also maintain the earned-income tax credit for needy families.

Paul described his proposal as a massive tax cut that would reduce revenue to the U.S. Treasury by $2 trillion over 10 years. Citing an analysis by the nonpartisan Tax Foundation, he claimed the plan would increase gross domestic product by approximately 10 percent and create "at least 1.4 million new jobs."

That sounds great on paper, and it will surely sound even better to skeptical Republican voters whom Paul needs to woo in early primary states.

But how much would it actually cost in lost revenue? The Tax Foundation said $2.97 trillion over 10 years, using a static basis, or $960 billion, based on "dynamic scoring" that accounts for economic growth. But another analysis by Citizens for Tax Justice, a nonprofit research and advocacy group, argues that it would cost as much as $15 trillion over a decade.

And how would Paul keep that much lost revenue from blowing "a massive hole in the budget deficit"? Unspecified spending cuts that would magically balance the budget.

See more here:
Rand Paul's Plan To 'Blow Up' The Tax Code Could Leave A ...

The phone calls were confounding, until they multiplied. People at the top of Kentucky Senator Rand Paul's network were being asked about a new group that wanted to turn donations into campaign wins. What, they asked, was the Concerned American Voterssuper PAC?

The short answer: A headache. The new iteration of the CAV super PAC is the childof a movement that mostly helps but sometimes bedevils Rand Paul. It was relaunched this week, with much fanfare, when long-time FreedomWorks CEO Matt Kibbe announced that he'd left the Tea Party group to become a senior PAC advisor. The new PAC would try to organize Iowa for Paul, starting with 40-full time organizers.Kibbe's goal, he told reporter Byron Tau, was to prevent 2016 from being another "train wreck for the GOP" by out-organizing the Republican establishment.

At FreedomWorks, Kibbe had endorsed Paul's work whenever he could. In 2013, he and FreedomWorks endorsed Paul's filibuster over the legality of drone warfare. In 2014, he stood behind Paul to endorse the senator's civil suit overthe NSA's bulk data collection program, "on behalf of our six million-plus members."

We already have 40 full-time field staffers in Iowa knocking on doors and making phone calls.

Jeff Frazee, president, Concerned American Voters

Yet people close to Paul discouraged Kibbe from building up his own PAC. It was nothing personal; it was just that the candidate had already sanctioned America's Liberty PAC. One source euphemistically described Kibbe's move as entrepreneurial, to emphasize that the senator had not been pining for a second super PAC.

"We have no animosity and Mr. Kibbe is free to support Rand in any way he likes," America's Liberty PAC Jesse Benton told Bloomberg in an e-mail. "America's Liberty PAC, however, will remain the only Super PAC endorsed by Senator Paul, and the only PAC that will host Senator Paul at events."

Benton, that PAC's lead strategist, has spent eight years in Paul's orbit. He became the spokesman forthe quixotic presidential campaign of his father, former Texas Congressman Ron Paul, in 2007. He went on to workwith Paul's congressional re-election committee, for his Liberty PAC, for the Campaign for Liberty (a non-profit grassroots group created in the wake of the presidential bid) and for his 2012 presidential campaignand during all that, he married Paul's granddaughter and started a family. Benton and Campaign for Liberty president John Tate were making America's Liberty PAC what Right to Rise PAC was for Jeb Bush, or what Priorities USA Action was for Hillary Clinton.

But Concerned American Voters pulled from another group of pro-Paul activists. Its president is Jeff Frazee, who ran Ron Paul's youth outreach campaign in 2008 and turned that into the still-growing Young Americans for Liberty. Its senior tech advisor is Steve Oskoui, president of the 2012 pro-Ron Paul Endorse Liberty PAC that convinced Silicon Valley entrepreneur Peter Thiel to fork over $2 million. Thiel, famously, has resisted making a similar commitment to Rand Paul. While America's Liberty PAC is most famous (so far) for a WWE-styled commercial for Paul's PATRIOT Act filibusters, CAV is packaging itself as an on-the-ground disrupter.

"We already have 40 full-time field staffers in Iowa knocking on doors and making phone calls," Frazee told Bloomberg. "Our team has knocked on over 75,000 doors and made over 70,000 phone calls as of today. We're building a grassroots operation that the other candidates won't be able to compete with in Iowa. Based on polling and the responses we're getting back, it's certainly a state we think Rand can win."

Excerpt from:
A New Pro-Rand Paul Super PAC is Making Pauls Official ...

Libertarian-ish Republican presidential candidate Rand Paul debuted his new plan to blow up the federal tax code yesterday, and if you havent read Jim Newells scorching take on it, then theres something deeply flawed with you and you should remedy it immediately. The gist of Pauls plan (replacing the current tax structure with a 14.5-percent flat tax) is the gist of basically every Republican tax plan: massive transfers of wealth up the economic ladder with a few paltry scraps thrown to the middle class that allow Republicans to claim theyre focused on working families.

As Pauls Wall Street Journal op-ed notes, he crafted this plan with the assistance of some of the high priests of supply-side economic theory: frequently and flagrantly wrong bozo Stephen Moore, flat-tax evangelist and dimwit billionaire rights activist Steve Forbes, and the also frequently wrong Art Laffer, who launched the trickle-down revolution thats given us over three decades of bad economic policy. Anyone familiar with these knuckleheads and the economic philosophy they espouse should already know what theyre promising with Rand Pauls tax scheme: huge tax cuts aimed primarily at corporations and the wealthy will supercharge the economy and produce untold millions of jobs and untold trillions of dollars in tax revenue.

Rands op-ed describes the effect as a steroid injection right into the economys underdeveloped buttocks:

Heres why this plan would balance the budget: We asked the experts at the nonpartisan Tax Foundation to estimate what this plan would mean for jobs, and whether we are raising enough money to fund the government. The analysis is positive news: The plan is an economic steroid injection. Because the Fair and Flat Tax rewards work, saving, investment and small business creation, the Tax Foundation estimates that in 10 years it will increase gross domestic product by about 10%, and create at least 1.4 million new jobs.

Im intrigued by the steroid metaphor, and not just because it implies that Pauls plan is unnatural and will have myriad undesirable side effects. (What does economic bacne look like?) Mainly it interests me because its very similar to a metaphor used by another politician who promised great things from his Art Laffer-inspired tax plan: Kansas Gov. Sam Brownback.

Brownback came into office intending to transform Kansas into a laboratory of conservative economic theory, and he consulted with Laffer who earned a cool $75,000 for just a few days work to craft the tax plan of supply-siders dreams. It obliterated taxes on small businesses and deeply cut tax rates for top earners, all with the assumption that the cuts would quickly kick the states economy into overdrive. Brownbacks preferred way of describing his plan was to liken it to an injection of adrenaline. Removing taxes on small businesses, Brownback boasted at a 2012 economic conference, would be like shooting adrenaline into the heart of growing the economy.

Laffer and Moore were no less sanguine about the immediate impact of the tax scheme Brownback had cooked up. They co-wrote a September 2012 paper for The Laffer Center For Supply-Side Economics in which they argued that tax cuts in states like Kansas would produce near immediate and permanent economic benefits:

The quality of schools also matters as does the states highway system, but it takes years for those policies to pay dividends, while cutting taxes can have a near immediate and permanent impact, which is why we have advised Oklahoma, Kansas, and other states to cut their income tax rates if they want the most effective immediate and lasting boost to their states economies.

Those immediate benefits never materialized. Kansas economy lagged badly after Brownbacks cuts went into effect and itcontinues to stumble. The tax cuts resulted in massive revenue losses that plunged the state into a budget crisis that it hopes to fix by slashing spending and raising taxes on the poor.

But Laffer and Moore, of course, dont think anything has gone awry. They once promised a near immediate and permanent economic boost from Kansas tax cuts. Now theyre telling people to be patient because tax cuts take time to work. You have to view this over ten years, Laffer told the Kansas City Star earlier this year. It will work in Kansas. Moore is similarly incredulous at people who claim that the Kansas tax cut experiment hasnt worked. As for Kansas, the tax cut has been in effect a mere 18 months, he wrote last July, not a lot of time to measure the impact.

Follow this link:
Rand Paul's demented promise: I'll do to America what Sam ...

Republican presidential candidate Rand Paul called Thursday for a "fair and flat tax" that would "blow up" the nation's tax code, offering a proposal his campaign said would cut taxes by $2 trillion over the next decade.

The first-term senator from Kentucky released the outline of a plan to institute a 14.5 percent income tax rate on all individuals and on businesses. It was among the first major policy proposals released by Paul's presidential campaign, although he did not make the full plan available for review.

"Basically my conclusion is the tax code can't be fixed and should be scrapped," he said in an interview with The Associated Press. "We should start over."

Many of the dozen major Republican candidates for president list tax reform among their priorities. Texas Sen. Ted Cruz, for example, is among the GOP contenders calling for the wholesale abolition of the Internal Revenue Service -- a position many experts say is unrealistic.

But few have offered detailed proposals, and while Paul said his plan would benefit American both rich and poor, he cited an independent analysis that his campaign did not make available to reporters.

In a column describing highlights of his plan published Thursday in The Wall Street Journal, Paul called for the outright elimination of payroll taxes on workers and of several other federal taxes, including those on gifts and estates, telephone service and all duties and tariffs. He also proposed eliminating all corporate tax subsidies and personal tax deductions, except those for mortgage interest and charitable donations.

Paul says the first $50,000 of income for a family of four would not be taxed and the earned-income tax credit would be preserved.

"In Washington, most Republicans are very tepid and very uninspiring on tax policy," he said in the interview.

It was not clear how Paul would ensure cutting taxes so deeply would not at the same time explode the nation's debt. He wrote in the column that his plan would "reduce the national debt by trillions of dollars over time when combined with my package of spending cuts," but he did not detail those cuts.

In the interview, Paul referred to his previous budget proposals, which include sweeping cuts in foreign and domestic spending. In particular, he has previously called to eliminate all aid to foreign governments, including Israel. He has also proposed eliminating the federal departments of education, energy and housing and urban affairs.

See the article here:
Rand Paul pitches plan to 'blow up' tax code | Fox News

Kentucky Sen. Rand Paul outlined some of the highlights of a "fair and flat tax" plan he was to unveil on Capitol Hill later on Thursday, saying that the measure will not only simplify the nation's sprawling tax code, but will allow Americans to keep more of the money they've earned.

"We have a 70,000-page tax code and we're chasing businesses overseas," the Republican lawmaker, also a candidate for the presidency, told Fox News. "We're chasing Burger King to Canada. Every day there's a new company reincorporating somewhere else."

Story continues below video.

"This would be the biggest proposal of any candidate so far," Paul told Fox News. "It would be the largest tax reduction in our history. Let's have the debate in our country [about where] money is better spent. Is it better spent by people that earned it or [by] sending it to Washington."

Paul said his plan will also keep the mortgage and charitable deductions, while not allowing any wealthy corporations or people to get away with paying no taxes.

In an opinion piece he wrote for The Wall Street Journal on Wednesday, Paul said President Barack Obama's middle-class economics plan's policies "have led to rising income inequality and negative income gains for families.

"Heres what I propose for the middle class: The Fair and Flat Tax eliminates payroll taxes, which are seized by the IRS from a workers paychecks before a family ever sees the money. This will boost the incentive for employers to hire more workers, and raise after-tax income by at least 15% over 10 years," Paul wrote.

In the column, Paul also said his plan "would blow up the tax code and start over."

He said he's consulted with the Heritage Foundations Stephen Moore, former presidential candidate Steve Forbes, who ran and lost on the flat-tax idea, and Reagan economist Arthur Laffer, to come up with a "21st-century tax code that would establish a 14.5% flat-rate tax applied equally to all personal income, including wages, salaries, dividends, capital gains, rents and interest.

"All deductions except for a mortgage and charities would be eliminated."

View original post here:
Sen. Rand Paul to Unveil 14.5 Percent Flat Tax for All